Every person in the music business loves the idea of traveling the magical $1,000,000 road. However, it’s difficult if you can’t see the road ahead. The problem is, this journey is only hard if there is no education or plan, which is why you might feel that making a million dollars is too intimidating. Truth is, we can fix that intimidation with a few simple formulas.
Appreciation
If you are seasoned in business even just a little, then you know appreciation is the key to creating valuable assets. In music, appreciation happens in a few places: intellectual property (copyrights and trademarks), company cash flow, and company asset holdings. As we build value in these three areas, we can begin to see the road to $1,000,000 more clearly because we know where the value and money are going to come from.
Conversion
All money in business is made on the conversion. How many eyeballs can we convert into followers? How many followers can we convert into email subscribers? How many subscribers can we convert into paying customers (fans)? How many paying customers can we convert into repeat buyers (aka Superfans)?
Getting to the $1,000,000
Know the value of the unit you are selling.
Know the value of the company you are running.
Know the Value of the Unit You Are Selling
Anytime someone decides to sell anything, they must know the price. However, if we know the unit price and the cost it took to make the product, we can then determine what our profit will be based on the unit and our road to the million dollars.
Example Cost Analysis
Unit Price: $0.0038
Cost to Produce: $4,000
Profitability Point: 1,052,631.58 units sold
Million Dollar Goal Gross by Unit: 263,157,896 streams
Royalty Payout: 25% ($0.00095 per unit) $250,000
Gross Profit Margin: 75% ($0.00285 per unit) $750,000
Warning: Music Is Volatile
Every song is a new product, which means each time you release a new song, you have to start all over again. If you can find ways to test snippets with your fanbase or involve them in the creation process, it will be easier to get the best results.
Know the Value of the Company You Are Running
If we know how much money the company is bringing in, then we can project how much money the company will possibly bring in over the next three years based on current trends. Though this is a bit advanced, it allows you to borrow against your company’s future earnings, putting the $1,000,000 in your pocket faster than you could actually make it.
The Dream Conversion
$100 Product x 10,000 Customers = $1,000,000
Because an average healthy conversion rate is 3%
10,000 customers equals 3% of 333,333 followers/subs
I Have 300k+ Followers, Why Am I Not Seeing the Money?
Nine times out of ten, it's two things: a connection between you and your fans, and a quality product. No connection means you have not been as relatable as you could be to your followers for them to actually want to buy from you. Secondly, the product that you presented was not of high enough quality or didn’t have enough value for the customer to consider it worth purchasing. Thirdly, you have no standout record that makes your base say you’re cool enough to buy from in mass quantities.
I’m Just Starting; Can I Do This in 12 Months?
Though anything is possible, making $1 million in 12 months for a new artist who does not have a team that is already competent in operating a business is highly unlikely. However, you will eventually get there with persistence and the right strategy.
Can You Give Me an Example of a $100 Product?
A gift pack is a perfect example when it is the only option to consume your physical product. It can contain all forms of music: vinyl, cassette tape, and CD, along with a poster and a hoodie or t-shirt. You could even sell this product at $200 and cut the customer conversion in half if your fanbase is really engaged!
Check This Out!
If you're a music creative or executive looking to build your label or publishing company in 60 days or less, with a step-by-step foolproof process, grab the 60-Day Record Label Course and get it done today! You’ll gain the ability to get real funding, avoid contractual pitfalls, and keep the middleman out of your pockets. Click the link below to get started now! If you’re skeptical, grab the free guide, "10 Ways to Increase Your Record Label Profits," which comes with a free split sheet download.
Growing Your Music Career with These Formulas
Will allow you to grow and scale faster.
Keep the wool off of your eyes.
Makes you more satisfied with the work you put in, knowing that it actually got the results you were looking for.
Winging It Until You Learn These Formulas
Will cause slower growth.
Disorganize the label’s finances.
May cause exhaustion by over-exerting your energy on other things that do not get to the bottom line formulation I’ve laid out today.
Conclusion
If you were struggling with growing to $1 million or just making more money from your fanbase, you now have the means to make your career worth the energy to become the successful artist or label you’ve always wanted to be.
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