The “Business” of a Band

Playing in a band can be a lot of fun. Lot’s of good times, emotional highs, and a few lows. It is a great experience to get on stage and make music with other musicians.

As fun and exciting as gigging with a band can be, if you are getting paid to be up there under the spotlights, you are nevertheless, running a “business”.

It can be beneficial for bands to step back and take a look at a few of the business aspects of running a band and how some issues can affect them in the long term.

Designate Responsibilities

As with any business, there are certain tasks and jobs in a band that should be designated. One of those jobs is the band booking.

Most successful bands will have that “one person” who is good at handling the business and scheduling the booking. This is usually a person that has good networking skills and a good head for numbers. It is a job that requires the investment of a lot of extra time and energy and sometimes this person will ask for an extra cut of the pay in return for the added responsibilities. Coming to an agreement on compensation for this position is well worth it for the headaches involved.

Another common factor in most successful bands is that they usually have one person who acts as a “music director”.

This is the person who organizes the song list and rehearsals. The one who pulls together the new material to be learned and keeps things moving effectively throughout rehearsals. They usually will organize set lists and see to it that the show runs smoothly on stage.

Neither one of these designated persons needs to operate as a “dictator” to be effective, and having someone in these positions should not impede the ability of a band that wants to operate as a “democracy”.

The rest of the band, however, should be in agreement that these positions require a certain amount of extra effort, above and beyond the call of duty, and should be respectful of that.

Taxes

Back in the old days you played gigs and got paid in cash with no paper trail. Nowadays the IRS has clamped down on clubs and venues and, quite often, bands will be issued a 1099 for earnings.

Someone will end up being responsible for the taxes on those earnings and it is often the person responsible for handling the bookings.

If the band plays a lot of dates, that tax bill can add up so it can be necessary for the business person in the band to issue 1099’s to the individual band members.

If you are having to claim your band income on taxes then you should also claim your band expenses as well.

This is not an attempt to give you tax advice, only to make you aware that you may “need” tax advice. If you are receiving a 1099 for your band income, be sure to talk to your accountant regarding possible write-offs against that income.

Equipment

Most musicians have their own gear – guitar players, drummers, keyboard players, bass players etc. – but a gigging band needs a PA system, lights and other incidentals to play shows.

Some bands are fortunate enough to have one person that owns and maintains the PA system. Other bands agree to purchase one as a band and pay for it with gig money.
In that case it is always a good idea to have a written agreement amongst the band as to what will happen if and when the band spits up.

There also needs to be an understanding as to the maintenance of the equipment. Who is responsible for repairs and upkeep. Is it considered a band expense?

The same holds true for the vehicle used for band equipment transportation. Did someone buy a van or trailer specifically for the purpose of hauling band equipment? Who is responsible for repairs and maintenance of that?

Band Splits

A band is very much like a marriage and there needs to be an understanding how things will be handled when the warm and fuzzy honeymoon is over and divorce is looming.

In the case of equipment purchased together as a band, you will want to be clear how everything will be dispersed in the event of a band split, and also when an individual member quits.
Will everything be sold off and the money divided? Will the equipment simply be divided? Will other members have an option to buy the equipment?

If an individual member quits will they forfeit their right to any equity? How about if they quit without working out a notice? Can their equity be stated in a dollar amount and purchased if they leave?

Other things to consider when a band splits.

Who “owns” the gigs on the books. Can that person continue on with another line-up?
Who “owns” the name of the band, who has the right to continue using it?
who “owns” the website and any promo material, t-shirts, hats, bumper stickers etc.
who “owns” the copyrights on original material and the masters of any recordings

Insurance

For most bands, an insurance policy for the equipment is pretty low on the priority list. It’s just not one of those “top of mind” issues when gigging.

The fact is though, that when you add up the totals, most bands have a fairly healthy investment riding down the road.

The threat of theft, fire and auto accidents is always close at hand, so it is wise to seek protection.

Many musicians think that their homeowners insurance policy will cover equipment losses, but the truth is, that most only cover losses at “home”. Most insurance companies will not cover losses on the road or at a venue.

There are a few companies that will write policies for bands, but musicians are considered high risk so they can be difficult to find. You may have to shop around.

Some high end venues require a band to have an insurance policy, with the venue named as beneficiary, in the event the band causes damage to the venue or injures patrons. These are considered “business” insurance policies and your local homeowners insurance agent may not have access to this sort of coverage.

You will also want to consider the insurance for the vehicle that transports the band equipment and who is responsible for paying the premiums.

As you can see, when forming a band, there are a number of important “business” issues that need to be addressed that have nothing to do with the “fun” part of a band.

It would be prudent to discuss and decide these issues up front so that everyone can get down to the important business at hand, which is – making great music!

Please do not hesitate to contact us with any questions!