by Robert Flis / October 6, 2021
The Sincop8ed Noize Foundation is proud to present its latest Rockalypse Workshop. Our guest speaker this month is Shevaughn Battle, a professional who has been working in and around the music industry for over 20 years. Shevaughn has had the opportunity to work in a variety of sectors including sound production, artist management, label management, concert production, marketing/communications and government affairs. For the last 16 years, Shevaughn has held the position of Regional Education Coordinator and Provincial Representative for Quebec with FACTOR (The Foundation Assisting Canadian Talent on Recordings). She joined us to discuss the importance of budgeting for a project and shared some valuable tips and tricks from her years of experience in the field.
FACTOR Funding
Shevaughn is a local representative for FACTOR in Quebec, meaning she represents the organization in the province and acts as a resource for musicians who have questions about programs and funding opportunities. Shevaughn has a presence at local events and festivals and is also responsible for juror recruitment for FACTOR - something she highly recommends because it’s a great way to understand the application process in greater detail.
When FACTOR first started in 1982 it had a modest budget of $200,000. That annual budget has now grown to $30 million. FACTOR’s programs support Independent Canadian artists and music companies operating in any language other than French. If you are working predominantly in French, FACTOR’s sister company Musicaction is available and gets their funding from the same sources (Canadian government and private radio broadcasters). In order to apply to one of FACTOR’s many programs, applicants must be Canadian citizens or a permanent resident. FACTOR funding is project based, meaning they support individual projects like albums, tours, showcases and the like. They also support a wide range of genres; everything from rock and hip hop to children’s music, indigenous and classical.
FACTOR focuses on funding projects that are commercially viable (meaning there is a commercial market for the product), and because of that, budgeting is extremely important. If an artist is spending money on a project, FACTOR wants to make sure that they will be getting a return. FACTOR provides funding for a wide range of activities associated with music projects. This includes sound recording, marketing and promotion, video, radio marketing, showcasing and touring. Any of these initiatives requires a budgeting plan, regardless of whether or not you’re applying for funding. FACTOR does not require a detailed budget for the application itself, but if it gets approved then one will be required.
What is a budget?
Essentially, a budget is an estimate of whatever a particular project you’re planning to embark upon is going to cost, and therefore how much you’re going to have to invest in it. Budgeting really comes down to balancing income vs expenses. Different sources of income can include grants and funding, merch sales, streaming revenue or your own money that you’re investing in your project. As part of a business plan, the budget links where you are now and where you wish to be in a given period of time.
Why is it important?
A budget is crucial for a number of reasons, and they’re not all strictly financial. A budget helps set clear revenue and expense details on the Who, What, When, Where, Why and How of your project. It ensures that project goals are realistic and manageable, and it helps to establish a timeline which allows you to book essential team members in advance. Following this timeline helps ensure that every step is completed smoothly, and adjustments may be made along the way if necessary. Perhaps most importantly, a budget helps you avoid falling into debt. It’s also important to consider that your time has a monetary value – it is an investment on your part. No project is too small to have a budget.
Where do you Start?
Before getting into the budget, it makes sense to put together a business plan to define exactly the kind of project you’re going to be creating. Business plans can be long and detailed, but they don’t have to be. A marketing plan should be incorporated into your business plan, which will need a budget of its own.
When coming up with goals, it’s important to make sure they’re S.M.A.R.T. – Specific, Measurable, Achievable, Realistic and Timebound. Put together a timeline of when you expect specific stages of your project to be completed, as well as a final deadline. Research everything surrounding your project and what you’ll need to complete it. This includes funding options. It’s also a good idea to have backup plans in case you run into complications. Have other options in mind in case it turns out that you can’t afford to follow through with your initial plan. Know where you’re willing to be flexible and where your ideas are set in stone.
Elements of a Budget
The elements of a budget can be broken down into four main groups: expenses, financing, revenue and cash flow.
Expenses
There are different types of expenses to consider when evaluating the cost of a project. You have pre-production costs, which, if you’re working on a recording project, would include time and resources spent on song writing. Then come production costs, which include hiring musicians, producers, mixing and mastering engineers, as well as other expenses associated with producing your recording. Finally, you have post-production and perhaps the most important step of all, advertising and marketing, which encompasses website costs, photography, merch, social media ads, artwork, distribution, and anything else spent marketing your work. Expenses can also be grouped into two categories: fixed and variable. Fixed expenses are those that do not fluctuate, such as rent, salaries or equipment costs. Variable expenses can change as a result of sales. For example, if you sell more CDs, you must increase your spending to produce more in order to meet the demand. Do your research so you are not surprised by variable costs. Shevaughn strongly recommends always including a contingency in your budget. Whatever you think your project is going to cost, add twenty percent to that number, and that should be your real budget for the project.
Financing
So how do you get the money to actually pay for everything you want to accomplish? That’s where financing comes in. Funding is a great option to look into, whether it’s with FACTOR, Musicaction, Canada Council for the Arts, or another organization. You may want to take fundraising into your own hands and start a crowdfunding campaign – something that’s particularly useful if you have already built up a loyal following. Other sources you might be able to pull resources from include family and friends, pre-sales of your project, revenue from shows, tours, merch, streaming and downloads, any side hustles you may have, or simply your own personal savings. Remember, the goal is not to end up in debt, so if you’re going to do something like take out a loan to finance your project, be sure that you have the proper plan in place to get a return on your investment and not end up in the red.
Revenue
To help finance your project, you may be able to generate revenue from some of the following sources: Music sales, live shows and tours, streaming (limited), YouTube ad revenue (limited), off-stage sales and merch, sponsorships (if you have a sizeable audience) or publishing and licensing revenue. You will also want to set anticipated revenue numbers from sales of the completed project. How many sales do you predict you will make per month and what kind of revenue will that generate? This goes back to the S.M.A.R.T. rules we covered earlier, as well as a strong marketing plan to make sure your project has the exposure it needs to become profitable.
Cash Flow
Cash flow is the amount of money being transferred into and out of a business. You will need to take into account how much money you have in the bank and when you will need to pay certain people involved in your project. Do they need to be paid in full up front? Will they be paid at the end? Do you need to leave a deposit? You never want to be in a position where you can’t pay someone you owe, so cash flow is incredibly important to keep track of.
Tracking Your Budget
Tracking your budget throughout the course of your project is essential for a couple of reasons. Firstly, it helps ensure that you adhere to the timeline that you established for yourself from the outset. If you keep track of your estimated budget against your actual budget, you can avoid getting into trouble and overspending or accumulating unnecessary debt. Tracking is also useful for future projects as you learn how much things cost and can improve your budget for subsequent projects. It’s a common misconception that bands or artists need to open a business bank account or set up a registered company in their name. None of this is really necessary starting out, but it is important to keep a paper trail of all your receipts, payments and invoices, especially if you are receiving funding for your project. Avoid using cash in favor of e-transfers of PayPal for easier proof of payments. Finally, keep all receipts, for not only funding purposes, but also for your personal taxes. Great tools to help you track your budget include spreadsheets like Google Sheets and MS Excel, Timeline software like Toggl, Scanning tools like Scannable and organizational software like Evernote.
Conclusion
When it comes to budgeting, research and planning are key. Shevaughn emphasizes the importance of shopping around for the best rates and prices, which can be the difference between completing your project or going broke. Always include a contingency in case of the unexpected. If you do all these things and treat your project like a business, you will end up with a fantastic product that will make good on your investment.
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