In order to run a successful record label in South Africa having a clear business plan and a set of business objectives will help you to navigate your way towards achieving your goals and dreams.
A business plan is also a necessity in the event that you may want to approach local individual investors (e.g your friends, family & potential investors e.t.c) or financial institutions (e.g banks) for business loans or seed funding to get the record company up and running.
The last thing you want is looking clueless when asked by a loan officer or an angel investor to produce a business plan in your request to get the funding that you need.
Nonetheless, in this music business article we will just focus on the need for an executive summary.
The Importance of an Executive Summary
An executive summary is suppose to tell you or any reader what your record company is about especially why you think your record label will be successful. You must state clearly your main selling points including what makes it unique to anything that’s within the South African music industry.
An executive summary also acts as the first impression to any investor or financial institution. So it’s recommended to make sure your first impression is well presented. Because an executive summary might just be the only thing an investor will ever read about your record company’s business plan so why not make it count?
Things You Should Include in Your Executive Summary
1) You first need to address your main selling point and grab the attention of potential investors for your record company.
For example, a good selling point could be that you have just discovered or signed a talented singer, rapper or music producer to your record label. Therefore, this will reflect back to potential investors as a great business opportunity to fund or loan money to your record label.
2) The second thing you have to address in you executive summary is to identify the big problems that you see in the South African music industry.
For example, you might see that there aren’t enough prominent female rappers in SA Hip Hop. And that it’s on may be enough motivation why you are passionate about venturing in the SA Hip Hop market.
3) Once you have identified a “big problem” you need to follow through with a feasible solution to address all the above points you would have raised and highlighted.
For example, earlier on we mentioned that your big problem maybe a scarcity of prominent female rappers in SA Hip Hop. So to resolve that you need to develop a realist solution on how your record company will implement measures to work with female SA rappers by giving them an equal opportunity as male SA rappers.
4) Now one of the most important thing you have to deal with in your executive summary is to explain how you are going to handle your competition in the South African music industry. You must answer questions such as:
- Can your competition replicate your success? E.g your marketing strategy.
- Does your record company have competent management team to stay in business?
- Does your record label release music that can sell out arenas and concerts?
- How to Choose The Right Business Structure for Starting Your Record Label in South Africa
- Music Business – The Importance of Financial Reporting When You Run A Record Label