Music venues are some of the most important elements of the music industry. Concerts create revenue, but also many often kickstart artists’ careers. Concerts are a place for community and creativity. They are a vital part of the music industry. Yet, running a music venue is a difficult process. It can be rather costly due to equipment, management, and the infrequent nature of performances. The Music Industry Report 2020 from Exploration suggests that “…some venues seek sponsorship from private or public arts funding organizations to stay afloat”. While managing a music venue may feel overwhelming, this toolkit is here to help you navigate the process and make the right decisions.
The story of ROCKNROLLA is the story of four friends who, although they had music-related experiences in different fields, had never tackled a business like a music venue. Eventually, what seemed like different skills became complementary.
The project started with a start-up budget that needed financing. Not having any bank records or activity as a company, it was very difficult to get such financing. At this point, the mutual guarantee societies appeared as one of the possible instruments to finance a cultural project. Finally, through the JEREMIE mutual guarantee funds, it was possible to finance the project whose amortisation was achieved a year ahead of schedule, thanks to certain good financial practices.
DIGITAL TOOLS: FINACIAL CONTROL AND ANALYSIS
Digital tools are presented as a support for the business management. Having a digital POS (point of sale) that facilitates daily accountancy, warehouse and invoicing data to be stored in a digital database allowing smart business management. The integration of a smart cash drawer and dataphones in turn reduces in cash handling by staff, facilitating subsequent balances. The connection to a smart business management software such as Odoo offers data analysis and documentation management.
FINANCE STRATEGIES: INCREASE TURNOVER
Although increasing turnover may seem like an action that is beyond your control, there are certain practices that can help improve it. When a company increases its turnover, it can directly boost its bank rating, negotiate better prices from its suppliers, and strengthen its relationships with its customers and suppliers.
An example could be increasing the number of shows to help amortize fixed structural costs and provide stability for the staff. This may allow the company to access certain grants that would otherwise be unavailable, particularly if the company lacks a stable structure.
Having your own ticket sales platform may be a crucial strategy because the sales generated through this platform will be included in your turnover..
FINANCE STRATEGIES: TICKET SALES PLATFORM
A ticket sales platform enables your company to provide a personalized service to bands, agencies, and promoters, as well as monitor pre-sales to better adjust the needs of your staff. Additionally, having your own platform can allow you to reduce service fees on tickets.
Developing a customer database through your own ticket sales platform allows you to establish direct and ongoing communication with customers who have given prior consent. This data can then be used to develop personalized marketing campaigns segmented by music style, and to design offers and loyalty programs aimed at retaining regular customers.
FINANCE STRATEGIES: PUBLIC-PRIVATE FINANCIAL INSTRUMENTS
Securing funding to cover initial costs is always a crucial aspect of starting a project. Mutual guarantee companies are private entities that provide guarantees for financial operations that might not be approved by a bank otherwise. This guarantee can strengthen the financial stability of the operation, and even secure lower interest rates than a bank would typically offer without such a guarantee.
On the other hand, every country has a system for supporting culture through public grants, which may be available at the local, regional, or national level. Additionally, within the European Union, there are calls for proposals under the Creative Europe programme for consortia created among different Union member or eligible countries.
Some countries offer tax incentives to companies that invest in culture. For example, if a profitable company finances a cultural project, it may be qualified to pay less tax on those profits. This way, the company that develops a cultural project can increase its accounting liquidity while also promoting culture. Moreover, profitable companies often invest in foundations to take advantage of tax incentives. By partnering with foundations on cultural projects, private entities can provide financial support to this kind of projects.
SUSTAINABILITY: TRAINING, EDUCATION AND EMPLOYMENT
Partnering with technical schools and universities to offer internships, final projects, and mentorship opportunities can help to develop the skills of potential candidates for future positions on your staff. This also allows to build a pool of candidates who are already familiar with your projects and could be considered when you have some vacancies.
Venue business owners must ensure that their events comply with laws and regulations regarding noise disturbances, alcohol sales, maximum capacity, and other safety concerns. Breaking these rules can result in hefty fines while major violations, such as serving alcoholic beverages to minors, can result in a revocation of a business’s permits. To add on, venues must allow fire marshal inspections to show that no building codes are violated and that emergency exits are properly maintained and free of obstructions. Inspections also check for fire hazards and overall maintenance, proving the importance of a well-kept venue.
Venues also need blanket licenses to be able to allow musicians to be able to play music in their venue. ASCAP, a performance rights organization that handles lots of blanket licenses, defines blanket licenses as “…a license that provides unlimited access to an entire repertory during the term of a license for a single fee”. Exploration has a lot of resources on blanket licenses and performance rights organizations. Their article, “What is a Public Performance License?”, includes lots of informative research on performance rights organizations and how businesses can apply for blanket licenses with these PROs.