I know! You’re wondering when am I going to actually start talking about music! We all want to create that song that takes over the radio! We all want to travel the world and make tons of money doing what we love! We all want to provide an abundance of wealth for our families. In the marines they have a saying, “everybody wants to go to heaven but nobody wants to die!” I have another saying. You start right you end right. Start wrong and well. I’m sure all of you have heard horror stories about artists, producers, engineers, and content creators going broke. Selling millions of dollars worth of products and never seeing a dime. You’ve heard about groups like TLC, Rhianna, T-Pain, and countless others getting stiffed for more money than you can imagine and said to yourself, “that could never happen to me!” Well, it can! It happens more often than you would believe because the information you need is nowhere to be found. Well, here’s a few pointers that I’ve learned that can help you set yourself up for success before you even start. I wish somebody told me this. Last episode we came up with a plan and now its time to put that plan to work by building our infrastructure.
On the last episode I asked you to answer 6 questions. The first question was “who am I”. You may have answered with your name. You may have a catchy phrase or business name. That’s great! You have just created your brand! The first step is to protect and own that name. Too often young artists and entrepreneurs over look this first crucial step and end up losing BIG. Let me tell you a story from personal experience. I had been writing songs and uploading them for download under the name “Everett James” for years. I was gaining traffic and building a buzz when I noticed something terrible. Some lame saw I was gaining traffic with that name and started producing content with the same name. Next thing I know I have stuff popping up all over the internet, on my iTunes, on Spotify, Amazon of somebody else’s content. I’m still battling these people today! Let me give you another example from my real life. I created a free website under my publishing company only problem was I forgot to secure the domain name. I decided to finally build out my own website and to my horror found that someone had purchased my domain name before me! DON’T LET THIS HAPPEN TO YOU! As soon as you come up with your brand name go through every avenue and secure that name. Check the local businesses, domains, Facebook, Instagram, Twitter, or whatever you can possibly find and secure your name. This is like buying real estate. Once you have these secured you own it. In the information age your name is the most valuable part of your business. You will build your whole empire off this little name.
Once you have secured your name now its time to secure the bag. How will I get paid? I laugh out loud when I talk to young creative entrepreneurs and they don’t even have a bank account. Well, how the hell am I going to pay you? How are you going to become a millionaire if I don’t even know where to send the check? I am not an attorney or an accountant so I cannot give you legal advice BUT I’ll give you a hint. You have to decide if you want to be a sole proprietor with your real name or start a corporate entity under your business name. Sole proprietor is when you use your personal name and social security number to do business. I usually suggest an LLC when you are creating a business entity and then obtaining a tax identification number from the state you live in to do business. What is the difference? When you are a sole proprietor you are personally responsible for anything that happens to the business. If you get taxed, sued, or go bankrupt you are personally held liable. When you create a corporate entity such as an LLC that entity is legally looked at as a separate person. What that means is the business can be taxed, sued, or go bankrupt the entity will be held accountable, not you personally. Now why are we doing this? Because once we have our entity and our identification number we can go to the bank and start an account!
Next, we go to the bank. We will need the answers to our who, what, and where questions. I suggest starting a business account COMPLETELY SEPARATE from your personal account. I put separate from your personal account in bold because of legal issues that I am not qualified to dig in too. Comingling your funds is illegal and if you take a massive hit in your business it would suck if it also zapped your rent money and living expenses. It’s happened to me. When you go to the bank they will ask you what entity you wish to use, you will need your SSN/Tax ID number, some ask what industry, and a physical address (your who, what, and where). Some banks require you to make a deposit of some sort to start your account so save up some money to deposit in to the account. Once this is complete you are in business. BUT HOLD UP! I’m going to drop a bonus gem that will supercharge your business that I wish someone would have told me.
I was reading Russell Simmons biography and he had a chapter called “other peoples money”. When starting a business we often take our personal money to fund those start up years. That’s a bad idea. We need our personal money for our personal lives. We hear about business credit but never had anyone give us a plan on how to get it. When you go to the bank they have all these requirements and it seems impossible in the early years to get in. Well, I’m going to give you a strategy that can jumpstart your business and save you YEARS of heartache and pain. It’s called a secured credit card. I first learned about this through real estate training. When you start your business account with the bank you go in with some money you’ve saved up to make a deposit. Take half of the money and put it in to your business checking account. Take the other half and apply for a SECURED credit card. What is this? Secured credit cards are how you create credit when you don’t have any. You will make a deposit in to a secured account (saving/CD) with the bank. This deposit can be as little as 200 dollars or as much as you think you will need. The bank will hold that money as collateral and issue a credit card that is equal to that amount. When it is time to invest in your business don’t use your personal money! Use this card and pay it off immediately. A few pointers I’ll give you is to only put enough money on this card so that you can pay it off entirely very easily. 300 bucks was my starting point. The other pointer is to never leave a balance more than one third of the limit. If you have a secured card for 300 dollars never leave a balance more than 100 dollars. Now, when you need to pay for those subscriptions, cables, traveling expenses, use this card. What will happen is the bank will see that you are responsible and credit card offers will start coming in. Use this credit to build your business and save your own. That’s other people’s money!
Now that we have our business name, bank account, and credit active we can start linking our payment methods to our account. There are so many different methods out there so start claiming as many of them as you can think of. That’s Paypal, Cash App, Apple Pay, and whatever else you can think of. You want to make sure that you can take money however you can get it. Don’t leave any stone unturned because you want to claim every dollar you can get right from the start.
Now, we are set up for business. From this point forward we are about making MONEY! Money does not make you happy but it’s a great down payment.