Why Having A Budget Is Important
Written by Patrice on April 12, 2016
There is a 6-letter word that many are hesitant to talk about.
It’s not ‘artist’.
It’s not ‘photos’.
It’s not ‘videos’.
According to Merriam-Webster, budget is an amount of money available for spending that is based on a plan for how it will be spent.
When speaking with prospective clients, one of the very first questions I ask is “what is your budget for this project or campaign?”. The response I typically get is “we can work on one”, “whatever is needed”, or “it depends”.
What I found is that if I get any response that does not include a dollar amount, it means that they essentially don’t have a budget or any money set aside for the project or campaign that they sought me out for.
In business, there are expenditures. And if you’re in business (this includes independent artists that would like to pursue their music careers full time), it is important to fully understand your financial situation and whether or not you’re able to afford to fully invest in your business at that time. Here are some other reasons why having a budget is important:
Nothing Is Free
You need money in order to build a business. Whether you’re a small business owner or an independent artist, everything costs. There’s studio time, graphic design, web design, photography, videography, business formation & protection (LLC/DBAs, copyrights, trademarks, etc), and regular on-going marketing and promotion, because if no one knows about you, your product or business, then you have no business. The type of project and length of your campaign will determine how much you need to allocate for said expenses.
Choosing The Right Provider
Every market is nearly saturated. There are tons of photographers, videographers, consultants, designers, etc. But what sets each and every one of them apart is their quality of work, and fees. Knowing what you can afford will save you a lot of time searching for someone to hire for your project. Now, that doesn’t mean to automatically pick the least expensive person you can find and risk quality, but it does mean that you can make a well-informed decision on whether or not someone is a good fit for you or if you should hold off and increase your budget a bit to afford the person you really want to work with.
Good Money Management
Having an investor would solve many people’s problems because they would have access to more money to spend and invest into their project. I’ve heard many recording artists say that their goal is to get an investor or sign with a record label so that they can front their bills. Unfortunately, obtaining financial backing isn’t that simple. One must show that they’re worthy of the investment. They must show that they have a solid plan in place to generate revenue so that the investor would see a return on their investment. You must also display good money management to where an investor would feel confident that you won’t run off with their money and spend it foolishly. As the saying goes, “you gotta have skin in the game”, and most investors want to see what you’ve personally invested and how you’ve managed your own funds before they hand theirs over.
HOW THIS APPLIES TO ARTISTS…
Independent artists have a hard time grasping the fact that they are a business. Most want to just simply create all day and expect it to automatically pay the bills. But unfortunately, you must have some level of business acumen so that you can position yourself in a way that would allow you to earn a decent and livable wage from your creativity. If a budget isn’t easy to build at the time, think of some alternative ways to obtain the services you need. Check out these 3 independent artists who found creative ways to fund their projects:
GAETANO DINARDI WORKED HIS WAY TO A BUDGET
Singer, songwriter, producer, guitarist AND digital marketer from Bronx, NY, Gaetano DiNardi, recently wrote a blog that shares how you can find bloggers that care about your music. Within that post, he included the following budget breakdown for his most recent EP:
As you can see, he originally had a budget of $7,000, but went over by $500, totaling $7,500 to produce music, shoot 2 music videos, a photoshoot, album design, a new website, and promotional materials; all key ingredients to a good EP release. After speaking with Gaetano, he revealed that he was able to fund this project with his income from his full-time job as a digital marketing strategist, live shows he’s been booked for, and production projects with a few well-known artists. He mainly credits his ability to digitally market himself as the reason why he’s been able to successfully fund his own project.
JO UNIVERSAL BARTERED COMPLIMENTARY SERVICES
Jo Universal is an independent recording artist from Indianapolis, IN that I met at a music business school where I teach in Chicago. We had a great chat and stayed in touch via email and social media. I discovered that he released an EP last year and was extremely impressed by his sound and the production quality. I learned that he found a very creative way to fund his project. Being that he does photography and graphic work, he was able to build relationships with people who could help him record the project, and exchanged his services for their producing/engineering services, which was valued at around $1500.
DANAMI IS A MULTI-FACETED ARTIST THAT WON A GRANT
I had the pleasure of meeting Danami online after he watched a podcast where I was a guest. He’s a Detroit-native (like myself) and is currently residing in Minneapolis, where him and his band, The Blue, rock out on a regular basis. And when I say regular basis, I mean just that. Danami & The Blue are like family, they rehearse weekly, and they have a shows a few times a month at local venues. If you’re out that way, I’m sure you’ve heard of them. He released his EP last year, and followed it up with a docu-series that you can find on his YouTube channel. The quality of not only his music, but graphics and videos were amazing to where I had to reach out and ask who performed those services for him. To my surprise, he informed me that he was a full-time graphic designer by day, and filmed and edited his own docu-series, and did most of his graphic & web design work himself! With that in mind, he did state that his project still cost him approximately $5,000 to put together; which included 2 music videos and publicity. All of which was funded by the McKnight Foundation, that awarded him with a $25,000 grant. YES! $25K! He talks more about it here.
If you made this far, then you most certainly are determined to learn why having a budget is so important and how you can create one. I noticed the common denominator with all of these artists is that they made sacrifices to invest in themselves. Nothing was given; it was all earned. They “have skin in the game”.
Budget is not a word to be afraid of. It is a word that all business owners (and artists) should embrace. As adults, we know how much we can afford when it comes to living expenses such as rent, mortgage and/or transportation. The same mindset should be applied when it comes to building a business around your skill set.
NOTE: Business expenses are tax write-offs. Be sure to speak with your CPA (accountant) to ensure that you’re not overpaying Uncle Sam at the end of the year.