the easiest way to make money in the music business

Most likely, you’ve been performing regularly, attracting some new fans, selling a few CDs, and generally having a good time making music. In many ways, you’re already successful and deserve to feel good about your accomplishments. But there’s also a good chance you have a nagging sense of deficiency. More specifically, financial deficiency. You’re not alone. It seems the majority of people who pursue creative passions aren’t making the Big Bucks.

Even though this is a common situation for musicians, that doesn’t mean you should mindlessly accept it as a permanent state of being. There are ways to increase the flow of money into your life through music. Here’s the secret formula: The most successful artists develop “multiple streams of income.” The idea here is that small streams of cash from several different sources can eventually build into a steady, flowing river of revenue.

Crank up the money volume

In Barbara Winter’s insightful book, Making a Living Without a Job, she discusses “multiple profit centers.” Winter writes: “Rather than thinking in terms of having a single source of income (as we are trained to do when we see our income tied to a job), the savvy entrepreneur thinks about developing several income sources. With planning – and an openness to additional opportunities as they come along – you can create as many streams as you desire.”

To illustrate the point, Winter mentions Richard Branson, the founder of Virgin Records, who reportedly oversees more than 150 different small enterprises (when he’s not ballooning around the globe, that is). And Branson keeps inventing new projects all the time.

Reality: Don’t think you have to run an international corporation to make this tactic work. If we simply look at the standard ways an artist can earn income, this multiple profit center approach becomes clear.

A musical act can potentially make money from:

1) Live performance fees

2) CD and merchandise sales at live shows (and each piece of merchandise is a separate profit center)

3) CD sales through distributors and retail stores

4) CD sales through mail order catalogues

5) CD and merchandise sales from the artist’s own website

6) CD sales on Amazon.com, CD Baby and other Internet music outlets

7) Digital sales through iTunes and other music download sites

8) Song placement in films and television

9) Fees from licensing your songs, name and image

10) Mechanical royalties on CD sales

11) Performance royalties (via ASCAP, BMI and SESAC)

And these are just some of the ways.

Bottom line: the key to making a decent living with music lies in making sure that the many streams available to you are producing. Expecting your income only from live shows or only from retail CD sales to bring in a sufficient amount is risky at best. It’s a lot easier, for instance, to generate $500 a month each from five different (but related) sources than it is to pray that one source will reel in the whole $2500.

These multiple streams of income aren’t limited to activities that involve your songs or band. What other skills and opportunities do you possess that you could leverage into extra cash? Can’t think of any? Try again. Believe me, everyone has the potential to generate additional revenue – if he or she only searches for possibilities.

Example: Let’s say you have a basement full of recording gear that you’ve turned into a quality home studio. Perhaps you use it to record your own band or solo projects and are now ready to offer your services to earn extra cash.

Of course, the obvious thing to do is make your services available to record other bands and songwriters who are looking for good, inexpensive recordings of their music. And many people with home recording setups do just that. The only problem is, that’s all they do… except to also complain that not enough paying customers are booking time.

The trick is to look outside the normal, predictable methods. To demonstrate this philosophy, here are 11 random ideas on how a person with a home studio could create multiple profit centers:

1) Copyright registration service

It seems everyone is confused about how to register a copyright with the Library of Congress. It’s not really that difficult, of course, but many of your studio clients may pay you a fee to do it for them and save them the trouble.

2) Recording classes

Do you feel competent enough to effectively share your knowledge of the recording process with others? If so, offer basic recording classes in your studio.

3) CD duplication

People who use your recording services are prime candidates for CD duplication. Offer that additional service to your customers and reap the rewards.

4) Voice-overs and spoken word

Music is not the only way to make money with a home recording studio. You can also reach out to customers who need to record voice-overs for radio commercials and instructional multi-media projects, as well as poets and authors wanting to produce spoken-word recordings of their work.

5) Soundtrack library

Many tech-savvy musicians make extra money recording instrumental tracks that are used in the background of films, TV shows, video games, computer-based training materials, and more.

6) Compilation CDs

Most of your music customers are going to want to promote their songs after they have a finished product. Once you have a list of satisfied clients, offer to release a compilation CD of the best acts. The bands pay you a fee per song (perhaps $50 to $75 a minute) to put it all together. As long as the total fees you collect are more than your costs, you come out ahead – while helping a lot of acts get the notoriety they crave.